Construction continues Feb. 17, 2011, on a row of condominiums in Cranberry, Pa.,

Sales of new homes in February plunged to their slowest pace on record, the Commerce Department said Wednesday, and median prices dropped to the lowest level since December 2003.

Sales of existing single-family homes were also dismal in February, with volume down 3% from a year ago and median prices down 5.2%, the National Association of Realtors said.

The statistics portray a housing market that’s in a “very precarious situation,” said Chris Christopher, economist at IHS Global Insight. His firm still expects the market to bottom this year, but, “Things are being delayed a little bit more than we thought,” Christopher says.

The housing market may slide into another downturn, a “double dip,” after slow improvement, says Diane Swonk, chief economist at Mesirow Financial. She expects it to regain momentum later this year. But in a report Wednesday she said, “Even that forecast may be optimistic.”

New and existing home sales were boosted last year by federal tax credits. With those gone, both sectors are struggling to gain traction. Last month, sales of new homes fell 16.9% to a seasonally adjusted annual rate of 250,000. Median prices fell almost 14% from January, the Commerce Department said.

Bad weather hurt sales, as did unemployment and other economic concerns. “This is a consumer that continues to be uncertain about the future,” says David Crowe, chief economist at the National Association of Home Builders.

Some buyers are being stymied by tightened lending standards. Eight of 10 buyers who look at new homes for sale by Caresco Homes in Stockton, Calif., don’t qualify for loans, often because they lost homes to foreclosure or short sale, says sales manager Gina Carruesco.

IHS expects sales of new homes to edge up to 350,000 this year, from 320,000 last year, and for sales of existing homes to hit 5.1 million, from 4.9 million last year.

Some markets are off to a stronger start. In Hanover, N.H., the 26 agents in the Coldwell Banker Redpath & Co. office have closed 52 home sales this year, up from 41 at the same time last year, says owner Ned Redpath. “I’m holding my breath,” he says.

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